Khaitan & Co Represents NPCL In APTEL Tariff Appeals, Achieving Favorable Outcome

Khaitan & Co represents NPCL in APTEL Tariff Appeals, achieving favorable outcome

The leading law firm in India, Khaitan & Co successfully represented Noida Power Company Limited (NPCL) before the Appellate Tribunal for Electricity (APTEL) in its Tariff Appeals, resulting in a significant positive impact of about INR 300 to 400 Crores for NPCL. The appeals related to true up of the tariff recovery for FY 2018–19 and tariff determination for FY 2020–21.

Positive Outcome for NPCL
Appellate Tribunal for Electricity allows NPCL’s Tariff Appeals and clarifies key principles for tariff determination.

Appellate Tribunal for Electricity (APTEL) by its judgment dated 28.11.2025 in Appeal No. 98/2021 & Appeal No. 465/2023, has allowed the Tariff Appeals filed by Noida Power Company Limited (NPCL), arising from true up of the tariff recovery for FY 2018–19 and the tariff determination for FY 2020–21. The outcome has a significant positive impact estimated at about INR 300 to 400 Crores for NPCL.

Key Modifications and Remands by APTEL
APTEL has set aside / modified key findings in the tariff order of the Uttar Pradesh Electricity Regulatory Commission (UPERC) and remanded few issues, including Operation and Maintenance (O&M) expenditure (particularly the impact of Goods and Services Tax), financing cost on Delayed Payment Surcharge (DPS) and inclusion of treasury income in non-tariff income, for fresh determination on a time bound basis, preferably within 4 (four) months.

Quasi-Judicial Nature of Tariff Orders
APTEL has reaffirmed that tariff orders, though regulatory in nature, are quasi judicial orders and must record brief but clear reasons under each major head of claim to enable effective appellate scrutiny under Section 111 of the Electricity Act, 2003. It has also held that a regulatory commission cannot improve or reframe the reasoning of an impugned tariff order at the appellate stage, and its defence is confined to the contemporaneous record and the reasons forming part of the order.

Recognition of GST and Financing Costs
Importantly, APTEL has recognised the introduction of GST as a ‘Change in Law’ event and an uncontrollable factor, to be allowed over and above normative O&M, subject to prudence. It has upheld the allowability of normative financing cost on DPS and directed that treasury income derived from shareholders’ funds be excluded from non-tariff income for the purpose of reducing Aggregate Revenue Requirement, subject to verification.

MYT Framework Protection
Most notably, APTEL has reiterated that once capital expenditure and opening Gross Fixed Assets have been prudently approved and trued up under the MYT framework, they cannot be reopened through ad hoc disallowances in subsequent years, save under express review/amendment powers or in cases of fraud or misrepresentation. Consumer challenges to past, final MYT/true up orders have been rejected as an impermissible “side wind” in later year proceedings.

The conclusion of the case underlines the importance of careful regulatory compliance and adherence to prudential norms, ensuring that utilities like NPCL are fairly compensated while maintaining transparency and accountability in tariff determinations.

NPCL was successfully represented by Ms Divya Chaturvedi (Partner) and Ms Srishti Rai (Principal Associate), Khaitan & Co.

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